Coal India Limited would be the World’s biggest listed coal producer!

Coal India Limited is set to make history with Rs 15,200-cr IPO, Coal India’s initial public offering (IPO), the nations biggest and priced at a discount to global peers, is likely to attract investors and set the stage for it to become a global industry benchmark, akin to Brazil’s Vale in iron ore.

The government said investors can bid for Coal India (CIL) shares in the Rs 225-245 price band that will help it raise as much as Rs 15,200 crore. Ten per cent of the company, or 63.16 crore shares are on sale, which if priced at the top end, could make it the seventh most-valuable firm in whole of India with a market capitalization of $34 billion.

Coal India, with an output of 431 million tonnes a year, would be the world’s biggest listed coal producer. Its coal reserves are also the largest in the world with 10.6 billion tonnes compared with Peabody’s 9.3 billion tonnes and China’s Shenhua’s 7.4 billion tonnes.


Economic Times

Indian equity market holds a lot of opportunities!

India provides tremendous opportunities for financial inclusion via penetration and development in the Indian equity market today, a survey conducted by Nielsen Company said.

The top 5 cities in India contribute 84 per cent to trading in 2009-10, a figure up by 6 per cent from 2001-02. Cash trading volumes from Mumbai and Delhi alone account for 65 per cent of cash trading and 60 per cent of mutual funds volume.

The survey polled 1,207 current and potential retail investors from 12 cities across all geographic zones and levels of development, ages and occupation; 60 corporate, including banks and financial institutions, from the 4 metros and 120 SMEs from clusters in 12 cities throughout India.
There is also a great opportunity to impart financial knowledge. Nearly 94 per cent of retail investors have shown a strong willingness to participate in financial training programmers if they were to be offered in their vicinity.

The survey identified an appreciation of mobile phones as an enabler, a positive perception of competition as delivering better services and lowering trading costs and a desire for receiving financial training across the country. A clear majority of 56 per cent of retail investors across the country see mobile phones as the preferred channel that will likely enable them to participate in the equity market.

Source:Economic Times

Do you study the four stages before selecting your best sector to invest?

The importance of industry analysis is slowly dawning on the Indian investor as never before.Previously, investors purchased shares of companies without concerning themselves about the industry it operated in.It worked then as India was a seller’s market but now there’s immense competition that’s coming in so it becomes important for you to have the basics right before you take a step.

Cycle: The first step in industry analysis is to determine the cycle it is in, or the stage of maturity of the industry. As it gives you a better picture of what you can expect from it.
Nascent Stage: At the first stage, the industry is new and it can take some time for it to properly establish itself. In these early days, it may actually make losses or profits. At this time there may also not be many companies in the industry so it becomes very important to do a detailed study.
Growth Stage: Once the industry has established itself it enters a growth stage. As the industry grows, many new companies enter the industry. At this stage, investors can get high reward at low risk since demand outstrips supply.
Maturity Stage: After the halcyon days of growth, an industry matures and stabilizes. Rewards are low and so too is the risk. Growth is moderate. Though sales may increase, they do so at a slower rate than before. Products are more standardized and less innovative and there are several competitors.

Source: Rediff

IMF sees India booming at 9.7% in 2010!

The International Monetary Fund has projected the Indian economy will grow by 9.7 per cent in 2010 and 8.4 per cent in the next fiscal, driven by robust industrial production and macro-economic performance.

"India's macroeconomic performance has been vigorous, with industrial production at a two-year high. Leading indicators -- the production manufacturing index and measures of business and consumer confidence -continue to point up," the IMF said.

According to IMF Growth is projected at 9.7 per cent in 2010 and 8.4 per cent in 2011, led increasingly by domestic demand. Robust corporate profits and favorable external financing will be encouraging investments.
According to the World Economic Outlook report, growth in emerging Asia economies stands at about 9.5 per cent, with robust demand from China, India, and Indonesia benefiting other Asian economies.

Source: Rediff

The Richie Rich's of India!!!

India's rising stock market and a booming economy that's expanding by 8.5 per cent have boosted the net worth of India's richest people, according to the latest Forbes' India Rich List.The combined net worth of India's 100 richest people is $300 billion, up from $276 billion last year. This year, there are 69 billionaires on the India Rich List, 17 more than last year.

Mukesh Ambani, head of Reliance Industries, has topped the latest Forbes' India Rich List with a net worth of $27 billion, for the third consecutive time. Steel magnate Lakshmi Mittal, remains at No. 2 with a net worth of $26.1 billion. However both are less well off than they were a year ago.

The 100 richest Indians have a combined wealth of $300 billion, an all-time high and more than the combined GDPs of all the other nations in South Asia put together.

Let us take a look at the top 5 richest Indians:

1.Mukesh Ambani

Reliance Industries chairman Mukesh Ambani is the richest man in India with $27 billion in net worth. At $27 billion, Mukesh Ambani is as rich as Larry Ellison, the third richest American. Bill Gates at $54 billion is twice as rich as Ambani.

2.Lakshmi Mittal

Owner of ArcelorMittal, this business tycoon has stake in British soccer team QPR. Mittal is looking to invest in Brazil, India and West Asia. He owns 12-bedroom mansion in London's posh Kensington area.

3.Azim Premji

The software czar's company Wipro has done well over the last one year, recording a significant turnaround making Azim Premji the third richest Indian.

4.Shashi Ruia

The Ruia-owned Essar Group is looking for major expansions in all its businesses, including steel, oil and power. Essar Oil bought 50 per cent in Kenya Petroleum Refineries in July and is negotiating with Royal Dutch Shell to acquire three refineries. The Ruia’s stand at 4th rank.


5.Savitri Jindal

She is the non-executive chair of O P Jindal Group who took over the reigns of the steel and power conglomerate founded by her late husband Om Prakash in 1952.Shes in the 5th richest Indian.

Source: Rediff

What are price deflators?

Recently the GDP fiasco was blamed on the use of improper deflators, here’s an explanation that would help you understand it better

What is a price deflator?
 A deflator is used to convert data compiled over a period into prices prevailing at an earlier point in time. For example, the current price of a television can be deflated to what it would cost say three years ago. Essentially a deflator removes the effect of inflation from data, making it comparable across periods.

How is it used in India?
In India a combination of Wholesale Price Index (WPI) and Consumer Price Index (CPI) is used as deflator. The usage is dependent on a particular estimate we are trying to deflate. There would be different deflators for private consumption and government consumption. There is a difference in quarterly and year-end deflators; this is due to the fact that prices are not constant. At the yearend we have an overall measure of WPI/CPI which is used appropriately. This is why year-end estimates of GDP are more reliable that quarterly estimates.

Source: ET

Manufacturing sector creating lot of opportunities!

The union ministry of commerce industry is looking at formulating new policies to attract investments for setting up mega manufacturing hubs in India. It is believed that such a move would help ensure timely approval and clearance of investments needed for the booming manufacturing sector.

The ministry panel is also very confident about the economy registering 9% growth in the current fiscal year. However, looking upon the ongoing situation of the global economy and its impact on the country, the minister said, “We have not emerged fully out of this economic situation.”

The manufacturing sector would create a lot of job & investment opportunities in the coming few years as  the Indian economy is expected to lead to a sustainable increase of 0.5-0.6% in India’s real GDP growth rate and create an additional 8.9 to 9.4 million jobs.


Source: Economic Times